Iarnród Éireann may face three-year pay cuts

Monday 03 February 2014 22.19
Iarnród Éireann is seeking cost reductions of €8.5m in 2014
Iarnród Éireann is seeking cost reductions of €8.5m in 2014

Staff at Iarnród Éireann face pay cuts lasting up to three years under new cost-reduction measures negotiated at the Labour Relations Commission.

The cuts range from 1.7% of gross pay for those earning below €56,000 to 6.1% for employees earning above €100,000.

If unions accept the LRC proposals, pay cuts will run from 1 March for 28 months.

At that point, half of the pay cut will be restored for the next eight months, after which staff will return to their full original salaries.

Throughout the three years, the company will continue to pay increments and will maintain the current contributions to pension funds.

The proposals also detail arrangements for voluntary severance for a further 42 staff as part of a previously-announced redundancy scheme targeting 450 job cuts.

In the document, LRC Director of Conciliation Kevin Foley describes the latest proposals as the best possible that can be secured by negotiation to deal with what he called "the unprecedented crisis".

Iarnród Éireann staff rejected a previous set of cost-saving proposals last June.

General Secretary of the National Bus and Rail Union Dermot O'Leary said workers would be balloted on the latest proposals next week.

The document acknowledges employees' contribution in reducing operational costs from €422.5m in 2008 to €355.7m between 2008 and 2012.

During the same period, Government subvention fell by 29% with revenue falling by 15.7%.

The LRC document cites a 37% fall in staff numbers, and an increase in train services.

It says the company is seeking cost reductions of €8.5m in 2014, €6.5m in 2015, €5.8m in 2016, and €4.2m in 2017.

The extent of pay cuts will depend on the salary of the employee.

Those earning under €56,000 will lose 1.7% of basic pay with staff who receive between €56,000 and €61,999 experiencing a cut of 2.2%.

Employees earning between €62,000 and €74,999 will lose 3.3% of basic pay, while those between €75,000 and €79,999 will have their pay cut by 3.6%.

Salaries between €80,000 and €94,999 will lose 4.1% and those making between €95,000 and €99,999 will see a reduction of 5.1%.

Anyone earning above €100,000 faces a cut in basic pay of 6.1%.

An Irish Rail spokesperson said it was essential to make savings to ensure the future viability of the company, the long-term sustainability of train services for passengers and jobs for employees.

He said the delay in implementing cost-savings was costing the company €100,000 a week.

74% of staff were earning below €56,000 and would face the lowest temporary pay cut of 1.7%, he added.

The company expects to have the result of the union ballots on the proposals by 25 February.

The two other CIÉ companies, Dublin Bus and Bus Éireann, have also negotiated significant cost-reduction packages with their employees.